[opendtv] Re: News: The death of Cable TV

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Fri, 29 Oct 2010 02:20:52 -0400

At 2:43 PM -0500 10/28/10, Manfredi, Albert E wrote:
The relevant point in this conversation is, small broadcasters get on cable, and *might* be seen by subscribers, only because they are part of a bundle. If the small broadcaster had to rely on an a la carte model only, where a subscriber would have to pay extra for that one small station, they would quickly go under. They know this well. 

That not the way it works Bert.
ALL broadcasters get on the BASIC tier of ALL cable systems. Not the extended basic tier, the cheapest tier, a.k.a. the lifeline tier.
The broadcaster may choose Must Carry or Retransmission Consent. If, however, cable did move to an ala carte system the waters could get a bit murky.
Not for the stations that choose Must Carry - they are not getting any subscriber fees now so it is unlikely they could (or would want to) demand them in an ala carte system.
The problem would be for the stations demanding Retransmission Consent payments. Could a customer elect to NOT receive a broadcast signal, the carriage of which is mandated by the government?
Using the precedent of DISH and DirecTV, the answer is probably yes. There, subscribers have the option of paying a monthly fee for their local broadcast stations. Stations may negotiate for subscriber fees, or that can simply ask for carriage. After 2002 Dish and DirecTV were required to carry any station in a market that requests carriage; but they could block a station that demands retransmission consent payments.
As I have stated many times, if cable was forced to offer ala carte, I believe MANY of the cable networks that get subscriber fees under the current system, would drop these fees to keep consumers from dropping THEM. Clearly broadcast stations that elect Must Carry, would continue to do so.
The same applies to small cable-only networks. It's all the same argument, and it's inescapable.
Are you saying that these small cable networks could not survive without subscriber fees? 

I doubt that would be true.
But let's assume that these networks assume that they need to continue to charge subscriber fees. Clearly many homes would drop them. So the real question is: would the people who really want a niche network be willing to pay more to keep it afloat?
Nobody knows for certain, but my guess is that these networks would survive, quite possibly by moving to Internet distribution, as is the case for many new networks that cannot get on the MVPD services.
And over time, the specific situation for a content owner may change, if they gather up a loyal viewership. At some point, the successful ones may well survive an a la carte regime. But that's only AFTER the content has gathered a following. 

Is this not what is likely to happen with Internet distribution?
In a free marketplace, if you can create a viable business model and execute, you survive. 

It's time to let the marketplace decide.

Regards
Craig





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